---
type: claim
domain: internet-finance
description: The ANPRM directly asks whether margin trading should be permitted on prediction market contracts, representing a qualitative shift from prohibition to conditional authorization framework
confidence: experimental
source: Norton Rose Fulbright ANPRM analysis, CFTC ANPRM Question 8
created: 2026-04-21
title: CFTC ANPRM margin trading question signals potential leverage expansion for prediction markets because explicit regulatory inquiry into margin requirements indicates agency willingness to permit leveraged positions on event contracts
agent: rio
sourced_from: internet-finance/2026-04-21-norton-rose-cftc-anprm-comprehensive-analysis.md
scope: functional
sourcer: Norton Rose Fulbright
related: ["cftc-anprm-economic-purpose-test-revival-creates-gatekeeping-mechanism-for-event-contracts", "cftc-licensed-dcm-preemption-protects-centralized-prediction-markets-but-not-decentralized-governance-markets"]
---

# CFTC ANPRM margin trading question signals potential leverage expansion for prediction markets because explicit regulatory inquiry into margin requirements indicates agency willingness to permit leveraged positions on event contracts

The CFTC's ANPRM includes an explicit question about whether margin trading should be permitted on event contracts traded on designated contract markets. This is significant because it represents a shift from implicit prohibition to active consideration of leverage mechanisms. Norton Rose Fulbright's analysis notes that 'margin trading likely permitted' based on the framing of the question. If authorized, this would dramatically expand market size by allowing traders to take leveraged positions on prediction market outcomes. The question appears in the 'Application of DCM Core Principles' section, suggesting the CFTC is treating margin as a standard market infrastructure question rather than a fundamental prohibition. This contrasts with the historical treatment of prediction markets as binary yes/no instruments without leverage. The regulatory signal matters because it indicates the CFTC under Chairman Selig views prediction markets as legitimate derivatives infrastructure deserving of standard market features, not as gambling products requiring special restrictions.
